NICTD: No South Shore lease or sale in future plans

Denial about rail lines' future made amid controversy.

Denial about rail lines' future made amid controversy.

October 21, 2006|MARTIN DeAGOSTINO Tribune Staff Writer

INDIANAPOLIS -- Six blind men touched an elephant and described six different creatures, or so the story goes. The same could be said about possible privatization of the South Shore Line, based on multiple accounts of a Friday board meeting by the railroad's owner. Gerald Hanas, general manager of the Northern Indiana Commuter Transportation District, said he assured the board that state transportation officials never directed, instructed or encouraged him to explore the railroad's sale or lease. Hanas said he was merely asked to consider if some form of P3 -- a public-private partnership -- could generate sufficient cash to buy all or some of the 14 new cars the railroad needs to satisfy increased ridership. "I don't recall (transportation Commissioner Tom Sharp saying) we were under some gun to privatize," Hanas said, "but again it was merely a suggestion to look at the P3 model to see if there were any parts of it that make some sense for us." News of that Aug. 3 discussion, first reported by the Times of Northwest Indiana, triggered public concerns and political broadsides about a railroad lease that would mimic the $3.8 billion lease of the Indiana Toll Road. Democrats who opposed the lease reminded voters that the Daniels administration originally wanted the authority to lease highways, ports and rail lines. They demanded clarification from Sharp and Gov. Mitch Daniels, who dismissed their concerns. Sharp's office disputed any such conversation, and Daniels' office said "the bottom line is, the governor doesn't have any interest in this." Enter NICTD, which asked Hanas on Friday to clarify his conversation with Sharp. Mission accomplished, sort of, according to NICTD chairman David Niezgodski, of South Bend. Niezgodski said he is satisfied that Sharp didn't pressure or direct Hanas to explore privatization. But, he said, a conversation about public-private partnerships clearly occurred, if only briefly and only in the limited context of buying rolling stock. Niezgodski also reiterated NICTD's stance against a lease, if only because the money losing business would have little market value. The Toll Road, in contrast, "is a significant source of stable cash flows to the state," according to state documents published last year. "To us," Niezgodski said, "(leasing) is not an option." According to a third voice from the meeting, Hanas' account of his conversation with Sharp only reinforces the administration's interest in privatizing state assets, including the South Shore. Rep. Scott Pelath, D-Michigan City, said that interest is clear from the introduced version of the Toll Road bill, which covered all transportation hubs. And, he said, a government efficiency commission reinforced that interest in a recent report that questioned whether NICTD "is a candidate for sale or lease." "Why they are denying that they've had any interest in privatizing the South Shore is beyond me," Pelath said. "It seems like it'd be best if they'd just 'fess up to it." According to previous administration statements, the efficiency report Pelath cited was not a product of the administration, but of a legislatively created commission that has looked broadly at government operations. Even then, Daniels' office said, the lengthy report was submitted only by a subcommittee of the larger commission, and that Daniels had scarcely seen it before it was reported. Staff writer Martin DeAgostino: mdeagostino@sbtinfo.com (317) 634-1707